Omikron sends thousands of sick workers

Omikron, a variant of the Covid-19 virus that is becoming more and more popular in the world, causes far fewer hospitalizations. However, it is very dangerous for economies, because it sends hundreds of thousands of workers to isolation or sickness. Soon, this may affect Poland, as well as China, where the expansion of Omikron may cause global shortages in the supply of products imported from this country.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

Supply chains (again) at risk

In the US, Omikron was responsible for 98,3 percent last week. all new cases of Covid-19 (according to CDC data). You can see that it is rapidly replacing the Delta variant and other coronavirus mutations. Similarly, in Great Britain, already in the last week of 2021, the share of this variant in all infections was over 80%. According to official statistics, the share of the Omikron variant in Poland is now 8,5 percent. all infections. However, due to the small number of tests, this is probably an underestimated value. Epidemiologists assume that after January 20, Omikron's share should start to grow rapidly.

Omicron causes a significantly higher number of infections with fewer hospitalizations. In practice, this means that it puts less strain on health systems, but remains a risk to businesses having to cope with severe staff shortages. In the US, problems with workers suffering from sickness currently affect most industries, but the most vulnerable are health care, trade, airlines and industry. Wherever employees interact in large numbers with customers and with each other, Omikron causes problems. The American post office and courier companies also point out the possibility of delays in deliveries due to the lack of staff.

These are problems that may affect the results of the US economy in the first quarter of this year. However, it is worth remembering that the forecasts as to the financial results of companies are currently heavily underestimated. And even problems with the Omikron should not threaten to break the current earnings forecasts. The intense spread of Omicron also offers hope that societies will gain population resistance faster, which could hasten the end of the pandemic.

Omikron and China

However, concerns about the expansion of Omikron are raised by the situation in China, where most people are vaccinated with preparations that do not adequately protect against this variant. For this it has been used so far the principle of "zero-covid" causes that the society, so far not having extensive contact with the virus, remains particularly susceptible to infections. If there was an outbreak of Omicron in China, which is the world's largest exporter, it would be a serious problem for the entire global economy. And it could lead to a shortage of a great many products in the world. Therefore, it is worth looking closely at the situation in China in the coming months.

Diversification is advisable

When investing in the capital market at present, we should focus on portfolio diversification and the selective selection of companies. In connection with the epidemic, it is still worth observing companies that produce RNA vaccines - Pfizer, Biontech i Moderna. The company is also introducing its new vaccine to the market novavaxwhich, according to preliminary studies, also provides resistance to the Omicron. To get wider exposure to this market, you can take advantage of eToro's thematic wallet @ Vaccine-Med. An alternative can also be a wallet @RemoteWork, which brings together companies that benefit from remote work.

76% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you can afford the high risk of losing your money.

eToro is a multi-asset platform that offers both stock investing and CFD trading.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford the high risk of losing your money.

Past performance is not indicative of future performance. The trading history shown is less than 5 full years and may not be sufficient as a basis for an investment decision.

Copy Trading is not synonymous with investment advice. The value of your investment may go up or down. Your capital is at risk.

eToro USA LLC does not offer CFDs and does not make any representations or be responsible for the accuracy or completeness of the content of this publication, which was prepared by our partner using publicly available information about eToro that is not specific to entities.